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Why the public sector and local government need to refocus efforts to combat fraud-related losses

Thursday January 16th, 2014

Fraud is costing the public purse in the UK more than £20 billion a year, and detection rates in local government in particular are going down rather than up. Losses to central and local government are estimated at £2.6 billion and £2.1 billion respectively. A further £14.1 billion is lost to tax and vehicle excise fraud, while £1.9 billion is lost to benefit and tax credit fraud (NFA, Annual Fraud Indicator 2013).

A lot of these cases involve falsifying documents such as passports and driving licences to defraud the public sector. This is not, as you may be tempted to think, a case of petty crime committed by small-time crooks. The counterfeiting of documents happens on a large scale and underpins a wide variety of organised criminal activity.

Tony Machin

Tony Machin

In fact, there are identity factories in most major cities and towns in the UK acquiring printing equipment to produce high-quality counterfeits of official documents.

A key issue with fraud detection is that the authorities concerned – particularly in local government and the NHS – have nothing but the Mark 1 eyeball and, at best, some basic training to assess identity documents.

Simple forgeries may be discovered in such a way. However, as counterfeited passports and driving licences get more sophisticated, the person handling the checking – unless they are highly trained fraud officers – may be out of their depth, especially when looking at foreign documents.

The Home Office has now responded to this challenge with a report entitled ‘Guidance On The Use Of Document Scanners’. It is the first time it has encouraged the use of document scanner technology – in addition to the Mark 1 eyeball – to tackle fraud. The report highlights that these identity authentication systems are a ‘quick and easy’ solution that should play an integral part in the public sector and local government’s frontline defence against fraud.

In parts of the NHS, as well as some local authorities and the police, scanners are already used successfully to authenticate documents presented to assert and prove an identity, for example as part of the recruitment process.

Based on their experiences, the view of the Home Office is that scanners could enable more effective identification of counterfeit documents at the time they are presented. In addition, in their report they suggest that ongoing sharing of data on forgeries could improve success rates in the battle against identity crime significantly.

In this way, cases like the recent one of an illegal immigrant who was able to claim £91,000 in benefits over a period of seven years using fake ID documents could be nipped in the bud.

Our work with both public and private sector organisations certainly supports the recommendation made by the Home Office as we have seen the fundamental change that scanners can make to an organisation’s identity-checking procedures, and the significant savings they can bring. This is especially true in sensitive environments like the NHS, where you could risk people’s health if a ‘fake’ clinician is recruited, for example.

Tony Machin, CEO of TrustID

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